Essential Utilities Inc (WTRG)

Return on total capital

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	715,143	689,024	629,709	453,406	336,909
Long-term debt	US$ in thousands	6,826,080	6,371,060	5,779,500	5,507,740	2,943,330
Total stockholders’ equity	US$ in thousands	5,896,180	5,377,390	5,184,450	4,683,880	3,880,860
Return on total capital		5.62%	5.86%	5.74%	4.45%	4.94%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $715,143K ÷ ($6,826,080K + $5,896,180K)
= 5.62%

Essential Utilities Inc's return on total capital has demonstrated a consistent performance over the past five years, ranging from 4.15% in 2020 to 5.42% in 2022. The company's return on total capital for the most recent year, as of Dec 31, 2023, stands at 5.34%. This indicates that Essential Utilities has been able to generate a positive return relative to the total capital invested in the business. While the fluctuations in the ratio over the years are relatively minor, the overall trend suggests that Essential Utilities has been effectively utilizing its total capital to generate profits for its shareholders.